QUARTERLY REPORT – 28 APRIL 2017 1 Cobalt Blue Holdings Ltd A Green Energy Exploration Company March 2017 – Highlights Cobalt Blue Holdings Limited ACN: 614 466 607 Address: Level 2, 66 Hunter St, Sydney NSW 2000 Ph: +61 2 9966 5629 Website: www.cobaltblueholdings.com Email: [email protected]Social: Cobalt.Blue.Energy cobalt-blue-holdings 28 April 2017 Quarterly Report 0.15 0.18 0.20 0.23 0.25 0.28 0.30 0.33 0.35 Price (c) 02/Feb/17 02/Mar/17 24/Mar/17 27/Apr/17 02 February to 27 Apr 2017 Cobalt Blue Holdings (COB) Share Price ackaringa Project a Assays Confirm Thackaringa as a significant Cobalt-Pyrite Project. a Diamond and RC drilling campaign concluded, further drill assays and Scoping Study work underway. a Second round of drill results being processed, expect market release early May 2017. a Market demand forecasts show increasing cobalt market deficit, 9% CAGR demand growth to 2020F with Electric Vehicle (EV) battery demand the key driver. Corporate a Cobalt Blue Holdings Limited listed successfully 2 February 2017. a Options vesting date 2 May 2017. COB will then apply for ASX quotation, expected on or about 9 May 2017. a Conditions fulfilled to receive 51% of beneficial interest of Thackaringa Leases (EL6622, EL8143, ML86, ML87) to Cobalt Blue Holdings. This receipt is subject to retention clauses, detailed in this release. a Completion of successful China visit. ASX Code: COB Commodity Exposure: Cobalt & Sulphur Directors & Management: Robert Biancardi Non-Exec Chairman Hugh Keller Non-Exec Director Trangie Johnston Non-Exec Director Joe Kaderavek CEO & Exec Director Ian Morgan Company Secretary Capital Structure: Ordinary Shares on Issue at 27/04/2017: 95m Options (Unlisted – not vested): 28.25m Market Cap (undiluted): $27m Share Price: Share Price at 27/04/2017: $0.25 Pyrite Hill Deposit – as seen from Broken Hill – Port Pirie railway line
Transcript
QUARTERLY REPORT ndash 28 APRIL 2017 1
Cobalt Blue Holdings Ltd
A Green Energy Exploration Company
March 2017 ndash Highlights
Cobalt Blue Holdings LimitedACN 614 466 607Address Level 2 66 Hunter St
Sydney NSW 2000Ph +61 2 9966 5629Website wwwcobaltblueholdingscomEmail infocobaltblueholdingscomSocial CobaltBlueEnergy
cobalt-blue-holdings
28 April 2017
Quarterly Report
015
018
020
023
025
028
030
033
035Price (c)
02Feb17 02Mar17 24Mar17 27Apr17
02 February to 27 Apr 2017Cobalt Blue Holdings (COB) Share Price
ackaringa Projecta Assays Confirm Thackaringa as a significant Cobalt-Pyrite Project
a Diamond and RC drilling campaign concluded further drill assays and Scoping Study work underway
a Second round of drill results being processed expect market release early May 2017
a Market demand forecasts show increasing cobalt market deficit 9 CAGR demand growth to 2020F with Electric Vehicle (EV) battery demand the key driver
Corporatea Cobalt Blue Holdings Limited listed successfully 2 February 2017
a Options vesting date 2 May 2017 COB will then apply for ASX quotation expected on or about 9 May 2017
a Conditions fulfilled to receive 51 of beneficial interest of Thackaringa Leases (EL6622 EL8143 ML86 ML87) to Cobalt Blue Holdings This receipt is subject to retention clauses detailed in this release
a Completion of successful China visit
ASX Code COB
Commodity Exposure
Cobalt amp Sulphur
Directors amp Management
Robert Biancardi Non-Exec Chairman
Hugh Keller Non-Exec Director
Trangie Johnston Non-Exec Director
Joe Kaderavek CEO amp Exec Director
Ian Morgan Company Secretary
Capital Structure
Ordinary Shares on Issueat 27042017 95m
Options (Unlisted ndash not vested) 2825m
Market Cap (undiluted) $27m
Share Price
Share Price at 27042017 $025
Pyrite Hill Deposit ndash as seen from Broken Hill ndash Port Pirie railway line
QUARTERLY REPORT ndash 28 APRIL 2017 2
Thackaringa Cobalt ndash Broken Hill NSWCobalt Blue Holdings Limited (ASXCOB) reported significant and encouraging cobalt assays from our drilling program commenced in November 2016 at the Thackaringa project near Broken Hill NSW The results were reported 27 March 2017 and reinforce the substantial cobalt and pyrite development opportunity at Thackaringa Drilling was commenced by Broken Hill Prospecting Limited (ASXBPL) which retains a participating interest in the project
a Assays from our 2016 Diamond Drilling program confirm continuity and tenor of cobalt-pyrite mineralisation at Railway Pyrite Hill and Big Hill deposits
a The Diamond Drilling program provided representative material for planned metallurgical testwork that commenced in March
a A significant Reverse Circulation (RC) drilling program (commenced in February 2017) designed to expand and upgrade existing Thackaringa Mineral Resources is complete
The Thackaringa project is located within the Broken Hill Block of the Curnamona Province and is composed of Willyama Super-group high grade regional metamorphic gneisses schists and amphibolites Within the project area the local geology is dominated by quartz-albite-biotite gneiss quartz-albite gneiss and amphibolite dykes The extensive stratabound cobalt-pyrite mineralisation at each deposit (Pyrite Hill Big Hill and Railway) is hosted by quartz-albite gneiss
a At Railway assays confirm broad intersections of high-grade mineralisation with potential to add to the existing resource Mineralised intercepts include1
a Drillhole 16DM05 ndash 48m 1045ppm Co from 30m
b Drillhole 16DM06 ndash 42m 1615ppm Co from 28m
c Drillhole 16DM07 ndash 25m 1232 ppm Co from 35m and 26m 1456 ppm Co from 71m
d Drillhole 16DM08 ndash 4m 1301ppm Co from 57m and 19m 1221ppm Co from 76m
a At Pyrite Hill mineralised intercepts include
a Drillhole 16DM01 ndash 52m 840ppm Co from 95m including 7m 1111ppm Co from 96m
b Drillhole 16DM02 ndash 23m 1392ppm Co from 127m
Mineralisation at the three deposits has a combined strike length of 45 kilometres with widths varying from 25 metres to 100 metres The increased thickness is typically due to the extensive development of tight isoclinal folding within the pyritic horizon The 2016 drilling program comprised eight fully-cored diamond drill holes at three locations - Pyrite Hill Big Hill and Railway (Figure 1)
The work was undertaken primarily to provide sufficient material to undertake meaningful metallurgical test work By twinning previous RC holes the JV was able to confirm the tenor of mineralisation and compare the assays and sampling protocols for historical RC percussion drilling vs diamond drilling All 2016 holes were drilled at inclinations between 45 and 60 degrees into the steeply-dipping host lithology
A total Inferred Mineral Resource of 331Mt at 833ppm cobalt (at a 500ppm Co cut-off) has previously been estimated for Thacka-ringa (reference COB Replacement Prospectus released 31 January 2017)
The now completed 2017 drilling program comprised approximately 4675m of RC drilling plus 1797m of diamond drilling The program is designed to extend the drilling coverage and improve drilling density in support of future Mineral Resource estimations replace some of the historical drilling for QAQC purposes and provide material for further metallurgical testwork
COBrsquos activities have related to exploration there have been no activities relating to production or development
Following is a summary of the expenditure incurred on exploration activities during the quarter
Our schedule of work is shown below Looking forward we will be delivering a Preliminary Feasibility Study by mid-2018 and a full Bankable Feasibility Study by mid-2019
Figure 1 Pyrite Hill Big Hill and Railway deposits ndash as released Replacement Prospectus dated 3 January 2017
Figure 2 COB developmental timeline for the Thackaringa Cobalt Project
30 June 2017 30 June 2018 30 June 2019 30 June 2020
Stage OneA$2m expenditure in the ground ndash Inferred Resource Target
Deliver Scoping Study
Target Date 30 June 2017
Stage TwoA$25m expenditure in ground ndash Indicated Resource Target
Drilling has now concluded under Stage One of COBrsquos developmental milestones Preparation and assaying of the substantial Stage One drilling program continues We expect to release a second round of drilling results in early May 2017
In conjunction with this work significant technical studies are being undertaken as part of our Scoping Study commitments to be finalised mid-year
The Global Cobalt MarketThe following section has been included with permission from Hillcrest Consulting a global cobalt commodity consulting service
The global cobalt market is characterised by low supply coupled with high demand growth that will drive long dated price strength
Demand
a 9 demand CAGR to 2020 ndash Electric Vehicle battery demand the initial driver
Supply
a 3 supply CAGR to 2020 ndash Cobalt prices have little influence on primary producersrsquo decision-making as most cobalt is a by-product of either nickel or copper production Mounting evidence exists to suggest that new nickel and copper supply growth is cobalt constrained
Price Outlook
a 2017 marks the beginning of a sustained price rally set to revisit previous cyclical highs forecast to hit US$80000 per tonne by 2020F ndash refer to Figure 3 below However not all battery materials are the same as the lithium price is forecast to weaken
$0
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$0
$2000
$4000
$6000
$8000
$10000
$12000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
e
2018
e
2019
e
2020
e
LME
Co
99
3 U
S$t
Li C
arbo
nate
U
SDl
b
Lithium
Cobalt (RHS)
Lithium enters supply deficit and surplus
Cobalt enters supply deficit
QUARTERLY REPORT ndash 28 APRIL 2017 5
Corporate NewsCobalt Blue Holdings Limited listed successfully on the Australian Securities Exchange (ASX) ndash 2 February 2017
Options Participating IPO shareholders received 125 million free attaching Loyalty Options on a 14 basis
As part of an in-specie distribution Broken Hill Prospecting Ltd (BPL) shareholders received 875 million free Bonus Options (also on a 14 basis)
The Loyalty and Bonus options will vest on 2 May 2017 (three months after COBs ASX listing) COB will then apply for ASX quotation expected on or about 9 May 2017
Further details of the In-Specie Distribution Bonus Options and Loyalty Options may be found in Sections 21 22 amp 23 of the COB Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus) copies of which may be found at wwwcobaltblueholdingscom
Conditions fulfilled to receive 51 of economic interests of Thackaringa Leases to Cobalt BlueConditions have been fulfilled (Exploration Farmin Joint Venture Agreement Clause 31(a) amp 31(b)) to receive 51 of beneficial interest of the Thackaringa Project to Cobalt Blue Holdings Cobalt Blue notes the interest must be retained under Clause 31(d) reprinted below
Exploration Farm-in Joint Venture Agreement (Broken Hill Prospecting Ltd and Cobalt Blue Holdings Ltd) - Clause 31(d)
In order for COB to retain the Stage 1 Percentage Share received in accordance with clause 31(b) then during the period commencing on the Commencement Date and ending no later than 30 June 2017 (Stage 1 Earning Period) COB must
1 Complete an Exploration program of works within the JV Area (with a minimum lsquoin groundrsquo expenditure of AUD 2 million(inclusive of GST and in addition to the Execution Payment)) which is sufficient to define an Inferred Mineral Resource of100 Mt (to JORC 2012 standards) and give a notice to BHPL verifying the amount of Expenditure that COB has incurredon Exploration in the JV Area and
2 Complete a Scoping Study (to JORC 2012 standards)
Please note The tenement holdings described at the conclusion of this release do not show this interest as the satisfying conditions were met after the end of the quarter
Completion of Successful China VisitCEO Joe Kaderavek and Chair Robert Biancardi recently (4ndash8 April) completed a commercialtechnical visit to China They travelled extensively across four provinces visiting companies responsible for over 80 of Chinese cobalt capacity China processes approximately 50 of the worldrsquos cobalt and has long dated experience with cobalt extraction and technical expertise require to make cathodes (cobalt containing electrodes found in lithium-ion batteries)
COB management believes there are enormous benefits to co-operation for example deploying best in class technologies to achieve high yield low cost extraction processes The team were very impressed by Chinese research and development efforts particularly focussed upon cobalt salt production from sulphide materials (such as Cobalt Blue) Further plant design and state of the art process control allow for efficient processing of very high material volumes
From their viewpoint Chinese refineries are looking for diversification away from an increasing dependency on sourcing cobalt from the African copper belt The collective view was that current pricing (approx US$25lb) was sustainable with all industry participants making a good margin However further upward price pressure may cause battery makers to ldquothriftrdquo and use lower cobalt content cathodes in response
Looking forward we would like our shareholders to keep in touch with COB updates and related news items which we will post on our website the ASX announcements platform as well as social media such as Facebook ( ) and LinkedIn ( ) Please donrsquot hesitate to join the lsquoCOB friendsrsquo on social media and also to join our newsletter mailing list at our website
Joe KaderavekChief Executive Officer
Cobalt Blue HoldingsTelephone (02) 9966 5629 Email infocobaltblueholdingscom
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 2
Thackaringa Cobalt ndash Broken Hill NSWCobalt Blue Holdings Limited (ASXCOB) reported significant and encouraging cobalt assays from our drilling program commenced in November 2016 at the Thackaringa project near Broken Hill NSW The results were reported 27 March 2017 and reinforce the substantial cobalt and pyrite development opportunity at Thackaringa Drilling was commenced by Broken Hill Prospecting Limited (ASXBPL) which retains a participating interest in the project
a Assays from our 2016 Diamond Drilling program confirm continuity and tenor of cobalt-pyrite mineralisation at Railway Pyrite Hill and Big Hill deposits
a The Diamond Drilling program provided representative material for planned metallurgical testwork that commenced in March
a A significant Reverse Circulation (RC) drilling program (commenced in February 2017) designed to expand and upgrade existing Thackaringa Mineral Resources is complete
The Thackaringa project is located within the Broken Hill Block of the Curnamona Province and is composed of Willyama Super-group high grade regional metamorphic gneisses schists and amphibolites Within the project area the local geology is dominated by quartz-albite-biotite gneiss quartz-albite gneiss and amphibolite dykes The extensive stratabound cobalt-pyrite mineralisation at each deposit (Pyrite Hill Big Hill and Railway) is hosted by quartz-albite gneiss
a At Railway assays confirm broad intersections of high-grade mineralisation with potential to add to the existing resource Mineralised intercepts include1
a Drillhole 16DM05 ndash 48m 1045ppm Co from 30m
b Drillhole 16DM06 ndash 42m 1615ppm Co from 28m
c Drillhole 16DM07 ndash 25m 1232 ppm Co from 35m and 26m 1456 ppm Co from 71m
d Drillhole 16DM08 ndash 4m 1301ppm Co from 57m and 19m 1221ppm Co from 76m
a At Pyrite Hill mineralised intercepts include
a Drillhole 16DM01 ndash 52m 840ppm Co from 95m including 7m 1111ppm Co from 96m
b Drillhole 16DM02 ndash 23m 1392ppm Co from 127m
Mineralisation at the three deposits has a combined strike length of 45 kilometres with widths varying from 25 metres to 100 metres The increased thickness is typically due to the extensive development of tight isoclinal folding within the pyritic horizon The 2016 drilling program comprised eight fully-cored diamond drill holes at three locations - Pyrite Hill Big Hill and Railway (Figure 1)
The work was undertaken primarily to provide sufficient material to undertake meaningful metallurgical test work By twinning previous RC holes the JV was able to confirm the tenor of mineralisation and compare the assays and sampling protocols for historical RC percussion drilling vs diamond drilling All 2016 holes were drilled at inclinations between 45 and 60 degrees into the steeply-dipping host lithology
A total Inferred Mineral Resource of 331Mt at 833ppm cobalt (at a 500ppm Co cut-off) has previously been estimated for Thacka-ringa (reference COB Replacement Prospectus released 31 January 2017)
The now completed 2017 drilling program comprised approximately 4675m of RC drilling plus 1797m of diamond drilling The program is designed to extend the drilling coverage and improve drilling density in support of future Mineral Resource estimations replace some of the historical drilling for QAQC purposes and provide material for further metallurgical testwork
COBrsquos activities have related to exploration there have been no activities relating to production or development
Following is a summary of the expenditure incurred on exploration activities during the quarter
Our schedule of work is shown below Looking forward we will be delivering a Preliminary Feasibility Study by mid-2018 and a full Bankable Feasibility Study by mid-2019
Figure 1 Pyrite Hill Big Hill and Railway deposits ndash as released Replacement Prospectus dated 3 January 2017
Figure 2 COB developmental timeline for the Thackaringa Cobalt Project
30 June 2017 30 June 2018 30 June 2019 30 June 2020
Stage OneA$2m expenditure in the ground ndash Inferred Resource Target
Deliver Scoping Study
Target Date 30 June 2017
Stage TwoA$25m expenditure in ground ndash Indicated Resource Target
Drilling has now concluded under Stage One of COBrsquos developmental milestones Preparation and assaying of the substantial Stage One drilling program continues We expect to release a second round of drilling results in early May 2017
In conjunction with this work significant technical studies are being undertaken as part of our Scoping Study commitments to be finalised mid-year
The Global Cobalt MarketThe following section has been included with permission from Hillcrest Consulting a global cobalt commodity consulting service
The global cobalt market is characterised by low supply coupled with high demand growth that will drive long dated price strength
Demand
a 9 demand CAGR to 2020 ndash Electric Vehicle battery demand the initial driver
Supply
a 3 supply CAGR to 2020 ndash Cobalt prices have little influence on primary producersrsquo decision-making as most cobalt is a by-product of either nickel or copper production Mounting evidence exists to suggest that new nickel and copper supply growth is cobalt constrained
Price Outlook
a 2017 marks the beginning of a sustained price rally set to revisit previous cyclical highs forecast to hit US$80000 per tonne by 2020F ndash refer to Figure 3 below However not all battery materials are the same as the lithium price is forecast to weaken
$0
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$0
$2000
$4000
$6000
$8000
$10000
$12000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
e
2018
e
2019
e
2020
e
LME
Co
99
3 U
S$t
Li C
arbo
nate
U
SDl
b
Lithium
Cobalt (RHS)
Lithium enters supply deficit and surplus
Cobalt enters supply deficit
QUARTERLY REPORT ndash 28 APRIL 2017 5
Corporate NewsCobalt Blue Holdings Limited listed successfully on the Australian Securities Exchange (ASX) ndash 2 February 2017
Options Participating IPO shareholders received 125 million free attaching Loyalty Options on a 14 basis
As part of an in-specie distribution Broken Hill Prospecting Ltd (BPL) shareholders received 875 million free Bonus Options (also on a 14 basis)
The Loyalty and Bonus options will vest on 2 May 2017 (three months after COBs ASX listing) COB will then apply for ASX quotation expected on or about 9 May 2017
Further details of the In-Specie Distribution Bonus Options and Loyalty Options may be found in Sections 21 22 amp 23 of the COB Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus) copies of which may be found at wwwcobaltblueholdingscom
Conditions fulfilled to receive 51 of economic interests of Thackaringa Leases to Cobalt BlueConditions have been fulfilled (Exploration Farmin Joint Venture Agreement Clause 31(a) amp 31(b)) to receive 51 of beneficial interest of the Thackaringa Project to Cobalt Blue Holdings Cobalt Blue notes the interest must be retained under Clause 31(d) reprinted below
Exploration Farm-in Joint Venture Agreement (Broken Hill Prospecting Ltd and Cobalt Blue Holdings Ltd) - Clause 31(d)
In order for COB to retain the Stage 1 Percentage Share received in accordance with clause 31(b) then during the period commencing on the Commencement Date and ending no later than 30 June 2017 (Stage 1 Earning Period) COB must
1 Complete an Exploration program of works within the JV Area (with a minimum lsquoin groundrsquo expenditure of AUD 2 million(inclusive of GST and in addition to the Execution Payment)) which is sufficient to define an Inferred Mineral Resource of100 Mt (to JORC 2012 standards) and give a notice to BHPL verifying the amount of Expenditure that COB has incurredon Exploration in the JV Area and
2 Complete a Scoping Study (to JORC 2012 standards)
Please note The tenement holdings described at the conclusion of this release do not show this interest as the satisfying conditions were met after the end of the quarter
Completion of Successful China VisitCEO Joe Kaderavek and Chair Robert Biancardi recently (4ndash8 April) completed a commercialtechnical visit to China They travelled extensively across four provinces visiting companies responsible for over 80 of Chinese cobalt capacity China processes approximately 50 of the worldrsquos cobalt and has long dated experience with cobalt extraction and technical expertise require to make cathodes (cobalt containing electrodes found in lithium-ion batteries)
COB management believes there are enormous benefits to co-operation for example deploying best in class technologies to achieve high yield low cost extraction processes The team were very impressed by Chinese research and development efforts particularly focussed upon cobalt salt production from sulphide materials (such as Cobalt Blue) Further plant design and state of the art process control allow for efficient processing of very high material volumes
From their viewpoint Chinese refineries are looking for diversification away from an increasing dependency on sourcing cobalt from the African copper belt The collective view was that current pricing (approx US$25lb) was sustainable with all industry participants making a good margin However further upward price pressure may cause battery makers to ldquothriftrdquo and use lower cobalt content cathodes in response
Looking forward we would like our shareholders to keep in touch with COB updates and related news items which we will post on our website the ASX announcements platform as well as social media such as Facebook ( ) and LinkedIn ( ) Please donrsquot hesitate to join the lsquoCOB friendsrsquo on social media and also to join our newsletter mailing list at our website
Joe KaderavekChief Executive Officer
Cobalt Blue HoldingsTelephone (02) 9966 5629 Email infocobaltblueholdingscom
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 3
Our schedule of work is shown below Looking forward we will be delivering a Preliminary Feasibility Study by mid-2018 and a full Bankable Feasibility Study by mid-2019
Figure 1 Pyrite Hill Big Hill and Railway deposits ndash as released Replacement Prospectus dated 3 January 2017
Figure 2 COB developmental timeline for the Thackaringa Cobalt Project
30 June 2017 30 June 2018 30 June 2019 30 June 2020
Stage OneA$2m expenditure in the ground ndash Inferred Resource Target
Deliver Scoping Study
Target Date 30 June 2017
Stage TwoA$25m expenditure in ground ndash Indicated Resource Target
Drilling has now concluded under Stage One of COBrsquos developmental milestones Preparation and assaying of the substantial Stage One drilling program continues We expect to release a second round of drilling results in early May 2017
In conjunction with this work significant technical studies are being undertaken as part of our Scoping Study commitments to be finalised mid-year
The Global Cobalt MarketThe following section has been included with permission from Hillcrest Consulting a global cobalt commodity consulting service
The global cobalt market is characterised by low supply coupled with high demand growth that will drive long dated price strength
Demand
a 9 demand CAGR to 2020 ndash Electric Vehicle battery demand the initial driver
Supply
a 3 supply CAGR to 2020 ndash Cobalt prices have little influence on primary producersrsquo decision-making as most cobalt is a by-product of either nickel or copper production Mounting evidence exists to suggest that new nickel and copper supply growth is cobalt constrained
Price Outlook
a 2017 marks the beginning of a sustained price rally set to revisit previous cyclical highs forecast to hit US$80000 per tonne by 2020F ndash refer to Figure 3 below However not all battery materials are the same as the lithium price is forecast to weaken
$0
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$0
$2000
$4000
$6000
$8000
$10000
$12000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
e
2018
e
2019
e
2020
e
LME
Co
99
3 U
S$t
Li C
arbo
nate
U
SDl
b
Lithium
Cobalt (RHS)
Lithium enters supply deficit and surplus
Cobalt enters supply deficit
QUARTERLY REPORT ndash 28 APRIL 2017 5
Corporate NewsCobalt Blue Holdings Limited listed successfully on the Australian Securities Exchange (ASX) ndash 2 February 2017
Options Participating IPO shareholders received 125 million free attaching Loyalty Options on a 14 basis
As part of an in-specie distribution Broken Hill Prospecting Ltd (BPL) shareholders received 875 million free Bonus Options (also on a 14 basis)
The Loyalty and Bonus options will vest on 2 May 2017 (three months after COBs ASX listing) COB will then apply for ASX quotation expected on or about 9 May 2017
Further details of the In-Specie Distribution Bonus Options and Loyalty Options may be found in Sections 21 22 amp 23 of the COB Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus) copies of which may be found at wwwcobaltblueholdingscom
Conditions fulfilled to receive 51 of economic interests of Thackaringa Leases to Cobalt BlueConditions have been fulfilled (Exploration Farmin Joint Venture Agreement Clause 31(a) amp 31(b)) to receive 51 of beneficial interest of the Thackaringa Project to Cobalt Blue Holdings Cobalt Blue notes the interest must be retained under Clause 31(d) reprinted below
Exploration Farm-in Joint Venture Agreement (Broken Hill Prospecting Ltd and Cobalt Blue Holdings Ltd) - Clause 31(d)
In order for COB to retain the Stage 1 Percentage Share received in accordance with clause 31(b) then during the period commencing on the Commencement Date and ending no later than 30 June 2017 (Stage 1 Earning Period) COB must
1 Complete an Exploration program of works within the JV Area (with a minimum lsquoin groundrsquo expenditure of AUD 2 million(inclusive of GST and in addition to the Execution Payment)) which is sufficient to define an Inferred Mineral Resource of100 Mt (to JORC 2012 standards) and give a notice to BHPL verifying the amount of Expenditure that COB has incurredon Exploration in the JV Area and
2 Complete a Scoping Study (to JORC 2012 standards)
Please note The tenement holdings described at the conclusion of this release do not show this interest as the satisfying conditions were met after the end of the quarter
Completion of Successful China VisitCEO Joe Kaderavek and Chair Robert Biancardi recently (4ndash8 April) completed a commercialtechnical visit to China They travelled extensively across four provinces visiting companies responsible for over 80 of Chinese cobalt capacity China processes approximately 50 of the worldrsquos cobalt and has long dated experience with cobalt extraction and technical expertise require to make cathodes (cobalt containing electrodes found in lithium-ion batteries)
COB management believes there are enormous benefits to co-operation for example deploying best in class technologies to achieve high yield low cost extraction processes The team were very impressed by Chinese research and development efforts particularly focussed upon cobalt salt production from sulphide materials (such as Cobalt Blue) Further plant design and state of the art process control allow for efficient processing of very high material volumes
From their viewpoint Chinese refineries are looking for diversification away from an increasing dependency on sourcing cobalt from the African copper belt The collective view was that current pricing (approx US$25lb) was sustainable with all industry participants making a good margin However further upward price pressure may cause battery makers to ldquothriftrdquo and use lower cobalt content cathodes in response
Looking forward we would like our shareholders to keep in touch with COB updates and related news items which we will post on our website the ASX announcements platform as well as social media such as Facebook ( ) and LinkedIn ( ) Please donrsquot hesitate to join the lsquoCOB friendsrsquo on social media and also to join our newsletter mailing list at our website
Joe KaderavekChief Executive Officer
Cobalt Blue HoldingsTelephone (02) 9966 5629 Email infocobaltblueholdingscom
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
Drilling has now concluded under Stage One of COBrsquos developmental milestones Preparation and assaying of the substantial Stage One drilling program continues We expect to release a second round of drilling results in early May 2017
In conjunction with this work significant technical studies are being undertaken as part of our Scoping Study commitments to be finalised mid-year
The Global Cobalt MarketThe following section has been included with permission from Hillcrest Consulting a global cobalt commodity consulting service
The global cobalt market is characterised by low supply coupled with high demand growth that will drive long dated price strength
Demand
a 9 demand CAGR to 2020 ndash Electric Vehicle battery demand the initial driver
Supply
a 3 supply CAGR to 2020 ndash Cobalt prices have little influence on primary producersrsquo decision-making as most cobalt is a by-product of either nickel or copper production Mounting evidence exists to suggest that new nickel and copper supply growth is cobalt constrained
Price Outlook
a 2017 marks the beginning of a sustained price rally set to revisit previous cyclical highs forecast to hit US$80000 per tonne by 2020F ndash refer to Figure 3 below However not all battery materials are the same as the lithium price is forecast to weaken
$0
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
$100000
$0
$2000
$4000
$6000
$8000
$10000
$12000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
e
2018
e
2019
e
2020
e
LME
Co
99
3 U
S$t
Li C
arbo
nate
U
SDl
b
Lithium
Cobalt (RHS)
Lithium enters supply deficit and surplus
Cobalt enters supply deficit
QUARTERLY REPORT ndash 28 APRIL 2017 5
Corporate NewsCobalt Blue Holdings Limited listed successfully on the Australian Securities Exchange (ASX) ndash 2 February 2017
Options Participating IPO shareholders received 125 million free attaching Loyalty Options on a 14 basis
As part of an in-specie distribution Broken Hill Prospecting Ltd (BPL) shareholders received 875 million free Bonus Options (also on a 14 basis)
The Loyalty and Bonus options will vest on 2 May 2017 (three months after COBs ASX listing) COB will then apply for ASX quotation expected on or about 9 May 2017
Further details of the In-Specie Distribution Bonus Options and Loyalty Options may be found in Sections 21 22 amp 23 of the COB Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus) copies of which may be found at wwwcobaltblueholdingscom
Conditions fulfilled to receive 51 of economic interests of Thackaringa Leases to Cobalt BlueConditions have been fulfilled (Exploration Farmin Joint Venture Agreement Clause 31(a) amp 31(b)) to receive 51 of beneficial interest of the Thackaringa Project to Cobalt Blue Holdings Cobalt Blue notes the interest must be retained under Clause 31(d) reprinted below
Exploration Farm-in Joint Venture Agreement (Broken Hill Prospecting Ltd and Cobalt Blue Holdings Ltd) - Clause 31(d)
In order for COB to retain the Stage 1 Percentage Share received in accordance with clause 31(b) then during the period commencing on the Commencement Date and ending no later than 30 June 2017 (Stage 1 Earning Period) COB must
1 Complete an Exploration program of works within the JV Area (with a minimum lsquoin groundrsquo expenditure of AUD 2 million(inclusive of GST and in addition to the Execution Payment)) which is sufficient to define an Inferred Mineral Resource of100 Mt (to JORC 2012 standards) and give a notice to BHPL verifying the amount of Expenditure that COB has incurredon Exploration in the JV Area and
2 Complete a Scoping Study (to JORC 2012 standards)
Please note The tenement holdings described at the conclusion of this release do not show this interest as the satisfying conditions were met after the end of the quarter
Completion of Successful China VisitCEO Joe Kaderavek and Chair Robert Biancardi recently (4ndash8 April) completed a commercialtechnical visit to China They travelled extensively across four provinces visiting companies responsible for over 80 of Chinese cobalt capacity China processes approximately 50 of the worldrsquos cobalt and has long dated experience with cobalt extraction and technical expertise require to make cathodes (cobalt containing electrodes found in lithium-ion batteries)
COB management believes there are enormous benefits to co-operation for example deploying best in class technologies to achieve high yield low cost extraction processes The team were very impressed by Chinese research and development efforts particularly focussed upon cobalt salt production from sulphide materials (such as Cobalt Blue) Further plant design and state of the art process control allow for efficient processing of very high material volumes
From their viewpoint Chinese refineries are looking for diversification away from an increasing dependency on sourcing cobalt from the African copper belt The collective view was that current pricing (approx US$25lb) was sustainable with all industry participants making a good margin However further upward price pressure may cause battery makers to ldquothriftrdquo and use lower cobalt content cathodes in response
Looking forward we would like our shareholders to keep in touch with COB updates and related news items which we will post on our website the ASX announcements platform as well as social media such as Facebook ( ) and LinkedIn ( ) Please donrsquot hesitate to join the lsquoCOB friendsrsquo on social media and also to join our newsletter mailing list at our website
Joe KaderavekChief Executive Officer
Cobalt Blue HoldingsTelephone (02) 9966 5629 Email infocobaltblueholdingscom
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 5
Corporate NewsCobalt Blue Holdings Limited listed successfully on the Australian Securities Exchange (ASX) ndash 2 February 2017
Options Participating IPO shareholders received 125 million free attaching Loyalty Options on a 14 basis
As part of an in-specie distribution Broken Hill Prospecting Ltd (BPL) shareholders received 875 million free Bonus Options (also on a 14 basis)
The Loyalty and Bonus options will vest on 2 May 2017 (three months after COBs ASX listing) COB will then apply for ASX quotation expected on or about 9 May 2017
Further details of the In-Specie Distribution Bonus Options and Loyalty Options may be found in Sections 21 22 amp 23 of the COB Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus) copies of which may be found at wwwcobaltblueholdingscom
Conditions fulfilled to receive 51 of economic interests of Thackaringa Leases to Cobalt BlueConditions have been fulfilled (Exploration Farmin Joint Venture Agreement Clause 31(a) amp 31(b)) to receive 51 of beneficial interest of the Thackaringa Project to Cobalt Blue Holdings Cobalt Blue notes the interest must be retained under Clause 31(d) reprinted below
Exploration Farm-in Joint Venture Agreement (Broken Hill Prospecting Ltd and Cobalt Blue Holdings Ltd) - Clause 31(d)
In order for COB to retain the Stage 1 Percentage Share received in accordance with clause 31(b) then during the period commencing on the Commencement Date and ending no later than 30 June 2017 (Stage 1 Earning Period) COB must
1 Complete an Exploration program of works within the JV Area (with a minimum lsquoin groundrsquo expenditure of AUD 2 million(inclusive of GST and in addition to the Execution Payment)) which is sufficient to define an Inferred Mineral Resource of100 Mt (to JORC 2012 standards) and give a notice to BHPL verifying the amount of Expenditure that COB has incurredon Exploration in the JV Area and
2 Complete a Scoping Study (to JORC 2012 standards)
Please note The tenement holdings described at the conclusion of this release do not show this interest as the satisfying conditions were met after the end of the quarter
Completion of Successful China VisitCEO Joe Kaderavek and Chair Robert Biancardi recently (4ndash8 April) completed a commercialtechnical visit to China They travelled extensively across four provinces visiting companies responsible for over 80 of Chinese cobalt capacity China processes approximately 50 of the worldrsquos cobalt and has long dated experience with cobalt extraction and technical expertise require to make cathodes (cobalt containing electrodes found in lithium-ion batteries)
COB management believes there are enormous benefits to co-operation for example deploying best in class technologies to achieve high yield low cost extraction processes The team were very impressed by Chinese research and development efforts particularly focussed upon cobalt salt production from sulphide materials (such as Cobalt Blue) Further plant design and state of the art process control allow for efficient processing of very high material volumes
From their viewpoint Chinese refineries are looking for diversification away from an increasing dependency on sourcing cobalt from the African copper belt The collective view was that current pricing (approx US$25lb) was sustainable with all industry participants making a good margin However further upward price pressure may cause battery makers to ldquothriftrdquo and use lower cobalt content cathodes in response
Looking forward we would like our shareholders to keep in touch with COB updates and related news items which we will post on our website the ASX announcements platform as well as social media such as Facebook ( ) and LinkedIn ( ) Please donrsquot hesitate to join the lsquoCOB friendsrsquo on social media and also to join our newsletter mailing list at our website
Joe KaderavekChief Executive Officer
Cobalt Blue HoldingsTelephone (02) 9966 5629 Email infocobaltblueholdingscom
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 6
Previously Released Information This ASX announcement refers to information extracted from the following report which is available for viewing on COBrsquos website wwwcobaltblueholdingscom
a 27 March 2017 Assays confirm Thackaringa as a Significant Cobalt-Pyrite Project
a 31 January 2017 Replacement Prospectus dated 3 January 2017 (Replacement Prospectus) ndash supplemented by the supplementary prospectus dated 10 January 2017 (Supplementary Prospectus)
COB confirms it is not aware of any new information or data that materially affects the information included in the original market announcement and in the case of estimates of Mineral Resources that all material assumptions and technical parameters under-pinning the estimates in the relevant market announcements continue to apply and have not materially changed COB confirms that the form and context in which the Competent Personrsquos findings presented have not been materially modified from the original market announcement
Competent Personrsquos StatementThe information in this report that relates to exploration results Mineral Resources and Targets is based on information compiled by Mr Anthony Johnston BSc (Hons) who is a Member of the Australian Institute of Mining and Metallurgy and who is a non-executive director of Cobalt Blue Holdings Limited the Chief Executive Officer of Broken Hill Prospecting Limited and the Technical Manager of the Joint Venture Mr Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 amp 2012 Edition of the ldquoAustralasian Code for Reporting of Exploration Results Mineral Resources and Ore Reservesrdquo Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears
About Cobalt Blue LimitedCobalt Blue (ldquoCOBrdquo) is an exploration company focussed on green energy technology and a strategy of fast-tracking development of the Thackaringa Cobalt Project in New South Wales to achieve commercial production of cobalt This strategic metal is in strong demand for new generation batteries particularly lithium-ion batteries now being widely used in clean energy systems
COB has entered into a farm-in joint venture agreement with Broken Hill Prospecting Limited (ldquoBPLrdquo) in which COB seeks to acquire an initial 51 interest in the Thackaringa Cobalt Project COB will undertake exploration and development programs on the Thackaringa Cobalt Project and subject to the achievement of milestones will acquire 100 of the Thackaringa Cobalt Project
Thackaringa Cobalt ProjectThe Thackaringa Cobalt Project is strategically located 23km South West of Broken Hill New South Wales adjacent to the main transcontinental railway line Mineralised outcrop extends for over 10km with less than a quarter of this trend having been drill tested The large near surface deposits at Thackaringa make the project suitable for large-scale open cut mining methods
Cobalt is a necessary metal for the production of the latest generation high energy density lithium-ion batteries used for energy storage Cobalt demand is rising materially as energy storage applications such as electric vehicles and solar storage batteries penetrate the global economy
Tenement HoldingThe interests in tenements held by Cobalt Blue Limited at the end of the quarter and the related percentage of ownership
Thackaringa Cobalt ProjectEL 6622 0 Cobalt Blue Ltd
EL 8143 0 Cobalt Blue Ltd
ML 86 0 Cobalt Blue Ltd
ML 87 0 Cobalt Blue Ltd
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 7
Appendix 5BMining exploration entity and oil and gas exploration entity quarterly reportIntroduced 010796 Origin Appendix 8 Amended 010797 010798 300901 010610 171210 010513 010916
Name of entity Cobalt Blue Holdings LimitedABN 90 614 466 607Quarter ended (ldquocurrent quarterrdquo) 31 March 2017
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
1 Cash flows from operating activities11 Receipts from customers12 Payments for
(a) exploration and evaluation (516) (516)(b) development ndash ndash(c) production ndash ndash(d) staff costs (196) (246)(e) administration and corporate costs (256) (416)
13 Dividends received (see note 3) ndash ndash14 Interest received 1 215 Interest and other costs of finance paid ndash ndash16 Income taxes paid ndash ndash17 Research and development refunds ndash ndash18 Other (provide details if material) ndash ndash
19 Net cash from(used in) operating activities (967) (1176)
This includes $206k of 1-off costs in relation to the IPO and prospectus
2 Cash flows from investing activities21 Payments to acquire
(a) property plant and equipment ndash ndash(b) tenements (see item 10) (500) (500)(c) investments ndash ndash(d) other non-current assets ndash ndash
22 Proceeds from the disposal of ndash ndash(a) property plant and equipment ndash ndash(b) tenements (see item 10) ndash ndash(c) investments ndash ndash(d) other non-current assets ndash ndash
23 Cash flows from loans to other entities ndash ndash24 Dividends received (see note 3) ndash ndash25 Other (provide details if material) ndash ndash
26 Net cash from(used in) investing activities (500) (500)
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 8
Consolidated statement of cash flows
Current quarter
Year to date commencing 26 Aug 2016
$Arsquo000 $Arsquo000
3 Cash flows from financing activities31 Proceeds from issues of shares 1687 1055532 Proceeds from issue of convertible notes ndash ndash33 Proceeds from exercise of share options ndash ndash34 Transaction costs related to issues of shares convertible notes or options (553) (646)35 Proceeds from borrowings ndash ndash36 Repayment of borrowings ndash ndash37 Transaction costs related to loans and borrowings ndash ndash38 Dividends paid ndash ndash39 Other (provide details if material) ndash ndash
310 Net cash from(used in) financing activities 1134 9909
4 Net increase(decrease) in cash and cash equivalents for the period41 Cash and cash equivalents at beginning of period 8566 ndash42 Net cash from(used in) operating activities (item 19 above) (967) (1176)43 Net cash from(used in) investing activities (item 26 above) (500) (500)44 Net cash from(used in) financing activities (item 310 above) 1134 990945 Effect of movement in exchange rates on cash held ndash ndash
46 Cash and cash equivalents at end of period 8233 8233
5 Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
Current quarter
Previous quarter
$Arsquo000 $Arsquo000
51 Bank balances 8233 179752 Call deposits ndash ndash53 Bank overdrafts ndash ndash54 Other (provide details) ndash ndash
55 Cash and cash equivalents at end of quarter (should equal item 46 above) 8233 1797
6 Payments to directors of the entity and their associates
Current quarter
$Arsquo000
61 Aggregate amount of payments to these parties included in item 12 19662 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
63 Include below any explanation necessary to understand the transactions included in items 61 and 62
NA
7 Payments to related entities of the entity and their associates
Current quarter
$Arsquo000
71 Aggregate amount of payments to these parties included in item 12 ndash72 Aggregate amount of cash flow from loans to these parties included in item 23 ndash
73 Include below any explanation necessary to understand the transactions included in items 71 and 72
NA
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
QUARTERLY REPORT ndash 28 APRIL 2017 9
8 Financing facilities availableAdd notes as necessary for an understanding of the position
84 Include below a description of each facility above including the lender interest rate and whether it is secured or unsecured If any additional facilities have been entered into or are proposed to be entered into after quarter end include details of those facilities as well
NA
9 Estimated cash outflows for next quarter $Arsquo000
91 Exploration and evaluation 180892 Development ndash93 Production ndash94 Staff costs 6895 Administration and corporate costs 25796 Other (transaction costs re previous issue of shares) 47
97 Net cash from(used in) financing activities 2180
10 Changes in tenements (items 21(b) and 22(b) above)
There was no change in tenement during the period Subsequent to the end of the period the Company made a contractual payment under the Exploration Farm-in Joint Venture Agreement to reimburse Broken Hill Prospecting Limited (ldquoBHPLrdquo) for certain exploration costs
This marks the Commencement Date of the Joint Venture Agreement and the Company has earned a 51 beneficial interest in the joint venture assets
Compliance statement1 This statement has been prepared in accordance with accounting standards and policies which comply
with Listing Rule 1911A
2 This statement gives a true and fair view of the matters disclosed
Ian Morgan Company Secretary 28 April 2017
Notes1 The quarterly report provides a basis for informing the market how the entityrsquos activities have been financed for the past quarter
and the effect on its cash position An entity that wishes to disclose additional information is encouraged to do so in a note ornotes included in or attached to this report
2 If this quarterly report has been prepared in accordance with Australian Accounting Standards the definitions in and provisionsof AASB 6 Exploration for and Evaluation of Mineral Resources and AASB 107 Statement of Cash Flows apply to this reportIf this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to ListingRule 1911A the corresponding equivalent standards apply to this report
3 Dividends received may be classified either as cash flows from operating activities or cash flows from investing activitiesdepending on the accounting policy of the entity
